RobsOhio caught cooking both its job numbers and accounting books

About a month ago, Joe wrote this lede in describing JobsOhio’s first quarterly report this year:

Imagine if you had a multimillion dollar empire with no accountability or transparency except once a quarter you had to issue a public report in which you graded yourself on metrics you got to choose and nobody outside of your organization had any way to independently verify. Now, imagine you still had to go out there and basically give yourself a D and admit that you’re doing much worse today than you were most of last year. Congratulations, now you know what it feels like to be JobsOhio.

We’ve pointed out that the annual report showed fewer jobs committed in 2012 (JobsOhio’s first year) than in the final year of the Ohio Department of Development and how it’s on pace for even fewer commitments this year.

But over the weekend, the Dayton Daily Newsrevealed that JobsOhio had changed how it counts job commitments to exaggerate the number of job commitments it generated in 2012:

As you can see from these 2012 4Q numbers, JobsOhio was able to inflate its job numbers by 22% using its new method of counting.

Nearly one-quarter of the 76,000 job commitments JobsOhio says it helped secure for Ohio in 2012 would not have counted under the scoring system the non-profit used the previous year, a Dayton Daily News analysis has found.

The accounting switch doesn’t affect the number of jobs added or retained in Ohio, but changes how the state’s leading economic development organization reports its performance in helping grow the economy.

Basically, JobsOhio started counting job commitments generated from projects that it admits no incentives were given, but JobsOhio was tangentially involved:

In these instances, JobsOhio staff may have helped arrange meetings between companies with questions about regulations and key state officials, or helped connect companies looking for qualified employees with colleges and universities, said JobsOhio Chief Investment Officer John Minor.

So, if a company was expanding, but had a question about a state regulation, and JobsOhio told them who to call in state government and then that counted as JobsOhio obtaining a job commitment. Not surprisingly, this is a rather unconventional way of measuring job commitments:

The newspaper contacted officials in other Midwest states — Michigan, Indiana, Iowa and Wisconsin — with semi-private economic development organizations similar to JobsOhio. All take credit only for job gains for projects tied to the organizations’ financial assistance.

So, JobsOhio is the only “private” economic development organization that does this. And it’s doing it while JobsOhio, Kasich’s flagship economic initiative, is under incredible public scrutiny as to whether it will deliver better results than the public Ohio Department of Development.

The problem is that in the most recent quarterly report for the first quarter of this year, JobsOhio doesn’t say how many of the 4,043 new job commitments it reported it obtained that quarter are the result of this new and controversial accounting method because for the first time in its history, it stopped providing a breakdown of jobs committed with incentives and those that were committed with JobsOhio tangential involvement. So the 18% drop in new job commitments from the same quarter in 2012 could be even worse. We have no way of knowing because JobsOhio doesn’t disclose the data to do a real apples to apples comparison. In fact, you should assume its worse because why else would JobsOhio start hiding the data?

This morning, the Columbus Dispatch reports that it was able to do what may be the only legal public review of JobsOhio spending in its history thanks to Governor Kasich and the GOP General Assembly’s efforts to close off JobsOhio from any kind of public transparency or accountability. Here’s what the Dispatch found JobsOhio spent public tax dollars on over 18 months:

$6,725 in tax dollars on wireless phone bills;

About $11,000 for parking;

$291,000 to build and maintain JobsOhio-related websites (we, um, don’t spend this much and probably have more readers);

$1.35 million for the “Thrive In Ohio” ad campaign, launched late last year and designed to “deliver a rallying message that Ohioans are getting back to work,” included mostly in-state ads;

The Dayton Development Coalition got a $15,000 reimbursement for a sponsorship of the NCAA’s “ First Four” in Dayton;

$595,000 to pay the salaries of four of the agency’s more than 20 employees and spent additionally on health and retirement benefits, even though the Ohio Revised Code declares JobsOhio employees to be private employees.

In fact, JobsOhio defending using the public dollars to pay for its private employees saying that they were actually employees of another private entity it created:

JobsOhio spokeswoman Laura Jones disputes that the four were “JobsOhio employees,” saying they were employees of the little-known development agency JobsOhio acquired called the Ohio Business Development Coalition. JobsOhio is the sole member of the former Business Development Coalition (now called the JobsOhio Beverage System), which already had a grant contract with the state to help with economic development.

The JobsOhio Beverage System is the corporate shell that JobsOhio uses to manage the liquor profits it receives with its no-bid deal with the State of Ohio. And it appears that JobsOhio used its public money to subsidize pet projects of various regional Chamber of Commerce and ads telling Ohioans how great the economy is since Governor Kasich took office. Kasich is using state tax dollars to win the loyalty of countless regional Chamber of Commerce officials across the State by providing them millions in tax dollars to fund their pet projects like co-sponsoring NCAA basketball tournaments or marketing their minor league baseball team (the Toledo Mud Hens “got $35,000 to house and pay a development professional to execute a regional branding project.”)

All while JobsOhio also spent $367,000 for office remodeling and$362,000 for office furniture to build a private coffee bar so it could sit around and lament the fact that it couldn’t provide loans for economic development projects while cutting $15,000 checks to reimburse regional chambers for basketball tournaments and checks to run ads trying to convince Ohioans, not businesses looking to maybe relocate to Ohio, that Ohio’s economy had improved under Kasich. JobsOhio is not an economic development agency, it’s proven to be a pro-Kasich PAC. A PAC that legallyis allowed for corporations to give gifts to Governor Kasich (such as international travel) without ever publicly revealing which corporations are behind such gifts. A PAC that can freely spend taxpayer money and corporate money promoting a pro-Kasich political message with little to no public reporting or accountability. A PAC that uses corporate shell games to hide it funding, spending, and even its outrageous inflated salaries.

During that time, JobsOhio has been more focused in getting the regional chambers dependant on it for millions in taxpayer dollars those organizations can disburse to its own members and spend on its self-promotional pet projects than luring new companies to Ohio. It is actually subsidizing nine jobs that already existed for every “new” job pledge it says it has created. And it turns out that it may be grossly overstating the number of new job commitments it says it is responsible for.

And its spending millions of dollars on advertisements that don’t target out-of-state businesses looking to create jobs in Ohio, but in trying to persuade taxpayers, with their own money, that Ohio turned the economic corner under Governor Kasich, and not under Governor Strickland. JobsOhio is only a failure if you believed it was intended to be an earnest economic development agency. As a political racket, it’s been an outrageous and unquestionable smashing success.

But who could of predicted that JobsOhio would turn into a politicized organization that was more about press releases than job creation? One that, without public accountability, would engage in questionable ethics to inflate its success? One that without a system of public accountability and transparency would waste millions of state tax dollars on self-promotion and wasteful spending over actual job creation?

This will be like a slow strangulation if the pressure is kept up on this issue. The more people getting money from this slush fund the greater the chance of scandal. It’s a long way until November 2014. Fitzgerald, or whoever the democratic candidate will be, MUST hammer away at this like you are doing. Make Kasich explain, defend, justify etc. constantly. Because the more this is talked about, the more proposterous it looks especially when middle and working class people see their wages and benefits dwindle all while a chosen few enrich themselves. And they can’t run from this as long as they talk about Ohio’s economy.Republican- style socialism and corporate welfare should ALWASYS accompany any discussion of JobsOhio.

Think.

We must never forget that the day he left JobsOhio, Mark Kvamme donated $15,000 to the House Republicans’ candidate fund and gave $10,000 to House Speaker William Batchelder. Batchelder was the one who led the House Republicans to fast-track the law to shield JobsOhio from public audit, and Kasich signed the law in a closed-door ceremony.